Notice Concerning Acquisition of Trust Beneficiary Interest in Domestic Real Estate (ACROSSPLAZA Miyoshi (Land))

Transcription

1 September 26, 2014 For Immediate Release Investment Corporation: Daiwa House REIT Investment Corporation 236, NihonbashiKayabacho, Chuoku, Tokyo Masazumi Kakei, Executive Director (Code number 3263) Asset Manager: Daiwa House REIT Management Co., Ltd. Hirotaka Najima Representative Director, President and CEO Inquiries: Yuichi Yamagishi Director, Executive Manager of the Finance Department (CFO) (TEL ) Notice Concerning Acquisition of Trust Beneficiary Interest in Domestic Real Estate (ACROSSPLAZA Miyoshi (Land)) Daiwa House REIT Management Co., Ltd., the asset manager to which Daiwa House REIT Investment Corporation ( DHR ) entrusts the management of its assets, hereby announces that it has decided to acquire an asset as follows. 1. Acquisition Details (1) Asset type: Trust beneficiary interest in real estate (2) Property name: ACROSSPLAZA Miyoshi (land) (3) Planned acquisition price: 3,390 million yen (excluding acquisitionrelated costs) (4) Execution date of the purchase agreement: September 30, 2014 (planned) (5) Planned date of acquisition: September 30, 2014 (planned date of settlement and transfer) (6) Seller: Daiwa Information Service Co., Ltd. (7) Acquisition funds: Cash on hand and proceeds from debt financing (Note) (8) Method of settlement: Payment of entire amount upon transfer (Note) For details, please refer to the press release Notice Concerning Debt Financing announced today. 2. Rationale Based on the targets and policies of asset management prescribed in DHR s Articles of Incorporation, Daiwa House REIT Management Co., Ltd. decided to acquire the property having deemed that the acquisition would expand the asset size, further increase the stability of cash flow through increased portfolio diversification and secure stable revenues in the long term. Following the acquisition of ACROSSPLAZA Inazawa (land) on February 25, 2014, the property will be acquired through the utilization of collaboration with the Daiwa House Group, as Daiwa Information Service Co., Ltd., a Daiwa House Group company, is acquiring a property (land and building) from a third party and selling the land of the property to DHR. 1

2 3. Property Details (1) Property Overview Property number ACROSSPLAZA Miyoshi (land) Use Retail RM5 Category Mall type Overview of Specified Asset Type of specified asset Trust beneficiary interest in Overview Evaluation Planned date of acquisition real estate September 30, 2014 of building company Evaluation Planned acquisition price 3,390 million yen condition evaluation period Urgent repair costs Overview Trust September 7, 2005 Shortterm of trust beneficiary interest establishment date Trustee Sumitomo Mitsui Trust Bank, repair costs Trust Maturity date Limited (planned) (Note) September 30, 2024 Land Location Aza Kitashinno, Oaza Fujikubo, Miyoshimachi, Irumagun, Saitama Longterm repair costs PML Building Structure / floors Land area 24,018m 2 Date of construction Area Class II residential zone/ Gross floor classification class I lowrise exclusive area Building coverage ratio / FAR Type of residential zone 60% / 200% 50% / 80% Ownership Type of ownership ownership Total leasable area 24,018m 2 Designer Total leased area 24,018m 2 Structural designer Occupancy rate % Contractor Master lease company Inspection agency Property management Structural calculation company evaluation agency Number of tenants 1 Collateral None Special items: None (Note) Trustee of the property is scheduled to be changed from the current trustee, Mizuho Trust & Banking Co., Ltd. to Sumitomo Mitsui Trust Bank, Limited on September 30, (2) Overview of Leasing Lessee Mizuho Trust & Banking Co., Ltd. (Note) Contract form: Rent revision: Contract renewal: Early cancellation: Leased area Overview of Leasing Annual rent (excluding consumption tax) 24,018m 2 188,568,000 yen Use Contract period From September 30, 2014 to September 29, 2034 Tenant leasehold and security deposit 188,568,000 yen Fixedterm leasehold agreement for business During the leasehold period, the lessor and the lessee shall revise the rent on October 1 of each year, with October 1, 2015 set as the first such revision date. If the lessor or lessee wishes to renew the agreement, a notification shall be sent to the other party before six months from the date of expiry. In such a case, the lessor and lessee shall discuss in good faith the renewal of the agreement and the conditions. The renewed agreement shall be concluded after agreement has been reached through such discussions. The lessor and lessee may not terminate the lease agreement for personal reasons before the expiry of the leasehold period, with the exception of situations prescribed in the lease agreement. (Note) Trust beneficiary of the building located on the property is Daiwa Information Service Co., Ltd. 2

3 (3) Overview of Property Appraisal Overview of Property Appraisal Appraiser The Tanizawa Sogo Appraisal Co., Ltd. Appraisal value 3,540 million yen Appraisal date September 1, 2014 Value based on direct capitalization method 3,540 million yen Net operating income (NOI) for first fiscal year 169 million yen Net cash flow (NCF) for first fiscal year 173 million yen Discount rate 5.0% (Note) NOI and NCF are rounded to the nearest million yen. (4) Property Characteristics Property Characteristics Location The property is located in the southern part of Saitama Prefecture, approx. 30km from central Tokyo. From Tsuruse Station, the nearest station to the property, it is about a 30minute train ride to Ikebukuro Station on the Tobu Tojo Line. Because of this accessibility, the area has many workers and students commuting to workplaces and schools in the Tokyo metropolitan area. The property is surrounded by a mix of residences, retail properties, manufacturing plants and agricultural land. Warehouses and logistics facilities are also located in the area because of its proximity to the KanEtsu Expressway Tokorozawa Interchange. The facility on the property is situated along the KawagoeKaido street. Although the street in front of the property is a two lane road and is narrow, it is a highly convenient road running north and south. As such, it not only serves as an important residential road but also meets a growing need for retailers to open roadside shops. With car entrances available both along the KawagoeKaido street and the road on the northern side, the property provides an easy access by car and bicycle as well as on foot. Tenant composition Anchored by Yaoko, a food supermarket, the shopping center on the property is comprised of 24 tenants including home appliance mass merchant Kojima, hundredyen shop The Daiso, CDDVD rental shop TSUTAYA and drugstore Sugi Pharmacy. Trade area characteristics The trade area has a population size that is typical for a suburban area, and the population shows a growing trend. With a residential town in the hinterland, there is a solid source of regular customers. Although the competition environment is harsh, ACROSSPLAZA Miyoshi has a high competitive advantage in terms of daily necessities as it is the sole NSC (neighborhood shopping center) located along the KawagoeKaido street. Trade area population Distance from the property 1km trade area 3km trade area 5km trade area 2012 Population 17, , ,797 Number of households 7,181 65, , Population 17, , ,009 Number of households 7,330 67, ,669 Source: Basic Resident Register 4. Seller Profile 1. Name Daiwa Information Service Co., Ltd. 2. Location 7144 Ueno, Taitoku, Tokyo 3. Representative Katsuyuki Fujita, President 4. Business activities Real estate management 5. Capital 200 million yen (as of March 31, 2014) 6. Foundation date January 8, Net assets 12,872 million yen (as of March 31, 2014) 8. Total assets 99,786 million yen (as of March 31, 2014) 9. Relationships with DHR and the Asset Manager There is no capital relationship required to be stated between DHR/the Asset Manager Capital relationship and Daiwa Information Service. Daiwa Information Service is a subsidiary of the Asset Manager s parent company, Daiwa House Industry Co., Ltd. Personnel relationship Business relationship Status of classification as related party There is no personnel relationship required to be stated between DHR/the Asset Manager and Daiwa Information Service. DHR entrusts property management services and services as master lease company to Daiwa Information Service. Daiwa Information Service falls under being a related party of DHR/the Asset Manager. 3

4 5. Related Party Transactions As Daiwa Information Service, which is the seller of the property and the trust beneficiary of the building, is a related party, etc. as defined in the Act on Investment Trusts and Investment Corporations, the Asset Manager has gone through the necessary discussion and resolution procedures in accordance with its voluntary rules based on its regulations concerning conflicts of interest. 6. Status of the Seller Property acquisitions from parties with particular interests are as follows. The table below notes (1) the name of the company; (2) the relationship with a party that has a particular interest; and (3) the circumstances behind and reason for the acquisition. Property name (Location) RM5 ACROSSPLAZA Miyoshi (land) ( Aza Kitashinno, Oaza Fujikubo, Miyoshimachi, Irumagun, Saitama) Previous owner / trust beneficiary Owner before previous owner / trust beneficiary (1), (2), (3) (1), (2), (3) Acquisition (transfer) price Acquisition (transfer) price Acquisition (transfer) date Acquisition (transfer) date (1) Daiwa Information Service Co., Ltd. (2) Subsidiary of Daiwa House Industry Co., Ltd., the parent company of the Asset Manager (3) Acquisition for investment management purposes A party which does not have any particular interests 3,270 million yen March Brokerage None 8. Acquisition Schedule (1) Acquisition decision date: September 26, 2014 (2) Execution date of the purchase agreement: September 30, 2014 (planned) (3) Payment date: September 30, 2014 (planned) (4) Delivery date: September 30, 2014 (planned) 9. Outlook This acquisition will have minimal impact on the forecasts of results for the fiscal period ending February 2015 (from September 1, 2014 to February 28, 2015), thus there is no revision to the forecasts. * Distribution of this material: This material is distributed to Kabuto Club (a media correspondents club at the Tokyo Stock Exchange, Inc.), the press club at the Ministry of Land, Infrastructure, Transport and Tourism and the press club for construction trade newspapers at the Ministry of Land, Infrastructure, Transport and Tourism. * DHR s website: <Attachments> 1. Photographs and location map 2. Property portfolio after acquisition 4

5 <Attachments> 1. Photographs and location map 5

6 2. Property portfolio after acquisition Property number Property name Acquisition price (planned) (yen in millions) (Note) Investment ratio (%) (Note) Acquisition date (planned) (year/month/day) LB1 D Project Machida 7, /11/29 LB2 D Project Hachioji 12, /11/29 LB3 D Project AikawaMachi 2, /11/28 LB4 D Project ShinMisato 4, /11/29 LB5 D Project Urayasu I 7, /11/28 LB6 D Project Urayasu II 21, /11/29 LB7 D Project Akanehama 2, /11/28 LB8 D Project Noda 5, /11/28 LB9 D Project Inuyama 6, /11/28 LB10 D Project Gifu /11/29 LB11 D Project Neyagawa 4, /11/28 LB12 D Project Sapporo Minami /11/28 LB13 D Project Morioka 1, /11/29 LB14 D Project Sendai Minami 1, /11/28 LB15 D Project Tsuchiura 2, /11/29 LB16 D Project Gotenba /11/28 LB17 D Project NishiHiroshima /11/28 LB18 D Project Fukuoka Umi 3, /11/29 LB19 D Project Tosu 2, /11/29 LB20 D Project Kuki I 3, /4/1 LB21 D Project Kuki II 7, /4/1 LB22 D Project Kawagoe I 3, /4/1 LB23 D Project Kawagoe II 4, /4/1 LB24 DPL Inuyama 3, /4/1 LB25 D Project Fukuoka Hakozaki 3, /4/1 25 Logistics Properties Total 114, RM1 ACROSSMALL Shinkamagaya 7, /12/12 RM2 FOLEO Hirakata 5, /12/11 RM3 QiZ GATE URAWA 5, /12/11 RM4 UNICUS Takasaki 2, /3/27 RM5 ACROSSPLAZA Miyoshi (land) 3, /9/30 RR1 LIFE Sagamihara Wakamatsu 1, /12/11 RR2 FOLEO Sendai Miyanomori 6, /11/29 RR3 ACROSSPLAZA Inazawa (land) 1, /2/25 8 Retail Properties Total 33, Portfolio Total of 33 Properties 147, (Note) Figures of acquisition price (planned) are rounded to the nearest million yen and investment ratios are rounded to the nearest tenth. 6